The challenge for any business, particularly retail in whatever shape or form i.e., brick and mortar, online or hybrid, is discovering what customers want, what price they are willing to pay for a product, and when they are most likely be willing to buy. According to the PricewaterhouseCooper report – Retailing 2015: New Frontiers – the value proposition that guides consumer product purchases is changing. Today consumers will put heightened emphasis on personalization. They are increasingly proactive in their purchase decisions and selective about with whom they want to do business.
This means that retailers can no longer depend on second guessing consumers. Technology is no longer just about improving operational efficiency; retailers need to understand and anticipate consumer needs. In this new paradigm, we are seeing a need to integrated real-time data that comes from a multitude of sources into demand management solutions. In this environment customer data and relationships will become a key asset for retailers.
Amazon and Nordtsrom are two examples of retailers that have successfully harnessed technology to enable them to anticipate what customers will likely buy based on their browsing behaviour online. They are also using data culled from social media to identify consumer interests; match these interests to products in their store; and are using technologies like recommendation engines to push new products to unsuspecting consumers.
But these organizations are not the typical Malaysian retailer. In fact whilst Malaysia has its fair share or successful large retail businesses like 99 Speedmart, Econsave Cash & Carry, GCH Retail, Mydin, and Parkson, a sizeable number are actually SMEs. According to the Associated Chinese Chambers of Commerce & Industry of Malaysia (ACCCIM) Report of 2012 SMEs Survey, nearly 25 percent of 580,985 SMEs in the services sector are wholesalers and retailers. Many of these do not have the resources to invest in the kinds of technologies Amazon and Nordstrom are throwing at to solve the consumer puzzle – what the customer wants.
Seng Teong Chua, founder of Predictry, says this is the market that his organization wants to serve. Through cloud computing, he believes that Predictry can offer Malaysia’s SME retailers and wholesalers with the right technology to compete against the big boys. With funding from the Malaysian Development Corporation (MDEC), Predictry essentially provides relevant recommendations to shoppers through an in-house built algorithm that the company tweaks for each customer and site.
Chua explained his company today benefits from the success of Amazon. Many businesses that have used Amazon to reach customers recognize the value of a recommendation engine. Thus approaching these businesses to try Predictry’s solution is straightforward.
“Whilst Predictry is based in Malaysia, our customers are global. Our business, which is essentially a Recommendation-as-a-Service is hosted in the US and we serve customers all around the world,” he adds.
Chua says that retailers and marketers are fixated on conversion. But conversion is an on-going challenge for everyone. He reckons that conversion can best be achieved through relevancy. “To provide relevant product recommendations, our recommendation engine tracks which pages shoppers go to. We are able to map out viewing and purchasing behaviour. We also use information mined from their connected social networks to gleam valuable insight about consumer behaviour,” he explained.
Chua says that Predictry is able to provide relevant recommendations to shoppers because the company tweaks its algorithm for each site. The company targets SMEs and ecommerce sites that do not have the resources to build their own recommendation engines.
Maturing cloud technologies, more localized systems designed for smaller retailers, will enable for a more level playing field even as retailing becomes more personal. In this future, customer data and relationships will become a key asset for retailers. In this future, the secret to sustained sales will be in knowing what the consumer wants even before they know it.
The AT Kearney 2014 Global Retail Development Index reports that Malaysia has a high income per capita and a vibrant young population (nearly half of Malaysians are younger than 25) making it a strong and stable market. The country’s online retail market is projected to reach US$3 billion by 2017. In that future market, access to affordable predictive technology may spell success for local retailers. Predictry is banking on this future.